The US Securities and Exchange Commission (SEC) has charged five members of BitConnect’s promoter network over their alleged role in the marketing of the scam.
The regulator claims that the five promoted BitConnect as a “global unregistered digital asset securities offering that raised over $2 billion from retail investors” — many of whom lost their money when BitConnect collapsed in 2018.
SEC’s complaint (.PDF), filed in the US District Court for the Southern District of New York, names Trevon Brown (also known as Trevon James), Craig Grant, Ryan Maasen, and Michael “Michael Crypto” Noble, all of which reside in the country.
According to SEC, from roughly January 2017 to January 2018, Brown, Grant, Maasen, and Noble promoted, offered, and sold securities as part of BitConnect’s lending program, which promised clients a return as high as 40% on their investments by trading on the price of Bitcoin (BTC) and capitalizing on its volatility. Funds were sent in BTC and converted to BitConnect’s BCC.
Marketing was conducted through videos on YouTube and testimonial-style content that was published — sometimes several times a day.
In return, SEC says the promoters, among others in the network, earned a commission when “soliciting investor funds.” In total, it is estimated that $2 billion was raised during BitConnect’s lifetime and commission rates ranged from…